“But this new flexibility can’t erase every potential disqualifying event. If you had a 2020 plan-year Health FSA with a newly extended grace period through the end of 2021, you can’t disenroll from the grace period. The 2020 plan year is over.” William G. (Bill) Stuart Director of Strategy and Compliance January 21, 2021 A […]
“Pandemic layoffs have disproportionately affected lower-income wage earners. . . Those higher-income employees’ elections now constitute a much larger percentage of the total program, which could flip the plan from compliance to noncompliance.” William G. (Bill) Stuart Director of Strategy and Compliance December 3, 2020 2020 is the year that has turned many people’s lives […]
“Some employees undoubtedly are concerned that they’ll lose money because of forces beyond their control, no matter how accurately they tried to project their expenses. If they forfeit balances because of a natural disaster, they’re less likely to participate in the future. . .” William G. (Bill) Stuart Director of Strategy and Compliance June 11, […]
“You’d have to withdraw $24,000 from a taxable account or pay about two-thirds of the average Social Security payment during those 14 months that your Health Savings Account continues to fund all your medical expenses tax-free. When you’re in your 70s or 80s and living on a fixed income in a volatile financial market, an […]
“An employer best practice is to run the medical plan and the Health FSA concurrently. That way, employees can review changes in cost-sharing in medical plan each year to make the appropriate health FSA election. They usually can’t open their Health FSA mid-year to alter their elections to reflect changes in their projected out-of-pocket costs.” […]
“If you want to pay this year’s expenses this year and enjoy immediate tax benefits, a HSA/Limited-Purpose Health FSA combination allows you to pay your bills and gain a tax advantage this year, rather than carry financial obligations or delay tax benefits into the future.” William G. (Bill) Stuart Director of Strategy and Compliance December […]
“Employers have no control over the amounts (other than to limit them altogether) that individual employees find necessary to meet their medical, dental and vision needs in a given year. Rational employers will terminate Health FSA and HSA programs if they must pay a tax equal to 40% of the total value of contributions into […]
“This flexibility is a strong argument in favor of using this approach when employees transition from traditional to HSA-qualified coverage. Employers and participants must be vigilant to ensure that they don’t make a mistake that negates an employee’s HSA eligibility for an entire 12 months.” William G. (Bill) Stuart Director of Strategy and Compliance October […]
“There are three important ways employees benefit from participating in a Limited-Purpose Health FSA that employers should consider when reviewing whether to offer it: Additional tax savings, preservation of HSA funds and cash-flow advantages.” William G. (Bill) Stuart Director of Strategy and Compliance October 12, 2017 One of the more difficult concepts for benefits administrators […]
“The real fear should be low elections that participants spend well before the end of the plan year. In that case, participants have no forfeited balances, but they lose money by paying for eligible items with after-tax funds once they exhaust their low elections. Psychologically, not gaining something (additional tax advantages, which result in more […]
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